Domestic indices trade flat with negative bias in early deals

Indian equity benchmarks made cautious start on Wednesday tracking lackluster global cues. Markets are trading flat with negative bias in early deals on account of selling in Power and Utilities stocks, whereas buying in Oil & Gas and Energy stocks limited the down side. Traders were concerned as the government data showed that India’s economic growth hit a four-quarter low of 4.1%, partly driven by base effect. The growth was 20.1%, 8.4%, and 5.4%, in the first, second and third quarters, respectively. Though, downside remained capped as chief economic adviser (CEA) V Anantha Nageswaran said the Indian economy is better placed than other countries and the fear of stagflation is exaggerated. Traders took encouragement with government data showing that production growth of eight infrastructure sectors rose to a six-month high of 8.4 per cent in April on the back of better performance by coal, refinery products and electricity segments.

On the global front, Asian markets are trading mixed following the broadly negative cues overnight from Wall Street, as traders remained cautious amid fears surrounding high inflation and interest-rate hikes, with a senior US Fed official calling for several more rate hikes to combat ballooning inflation. Meanwhile, the manufacturing sector in Japan continued to expand in May, albeit at a slower pace, the latest survey from Jibun Bank revealed with a manufacturing PMI score of 53.3. Indonesia is closed for Pancasila Day holiday.

Back home, auto stocks were in focus reacting to their monthly sales numbers. Bajaj Auto fell after the company's commercial vehicle sales in May came 16 per cent lower on a yearly basis. However, Bharat Dynamics soared after the company signed a contract with the defence ministry for building Astra Mark-1 beyond visual range air-to-air missiles (BVRAAMs) worth Rs 2,971 crore.

The BSE Sensex is currently trading at 55547.37, down by 19.04 points or 0.03% after trading in a range of 55509.39 and 55791.49. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.10%, while Small cap index was up by 0.62%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.95%, Energy up by 0.78%, PSU up by 0.63%, Metal up by 0.43%, Industrials up by 0.38%, while Power down by 0.89%, Utilities down by 0.88%, Realty down by 0.31%, TECK down by 0.27%, Auto down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.50%, Asian Paints up by 1.45%, Tata Steel up by 0.99%, ITC up by 0.41% and SBI up by 0.30%. On the flip side, Wipro down by 1.08%, Dr. Reddy's Lab down by 1.02%, Ultratech Cement down by 0.80%, Infosys down by 0.72% and Power Grid down by 0.67% were the top losers.

Meanwhile, India’s economy grew by 4.1 per cent in the January-March quarter of 2021-22 (Q4FY22), pushing the annual growth rate to 8.7 per cent on account of better performance by manufacturing, mining and construction sectors. In the previous fiscal 2020-21, the economy had contracted by 6.6 per cent as the COVID-19 pandemic disrupted business activities. The National Statistical Office (NSO), in its second advance estimate released in February, had projected the GDP growth during 2021-22 at 8.9 per cent. The data released by the NSO showed that the 4.1 per cent expansion during the January-March period of 2021-22 is the lowest quarterly growth in FY22. The growth was 20.1 per cent, 8.4 per cent, and 5.4 per cent, in the first, second and third quarters, respectively. The GDP had grown by 2.5 per cent in the January-March quarter in the previous year.

According to the NSO data, India’s real GDP grew to Rs 147.36 lakh crore from Rs 135.58 lakh crore in 2020-21. Gross value added (GVA) growth during the fiscal ending March 2022 was at 8.1 per cent as against a contraction 4.8 per cent in the preceding year. The GVA growth in the manufacturing sector accelerated to 9.9 per cent during the year as against a contraction of 0.6 per cent earlier. GVA growth in both mining and construction was 11.5 per cent. These two large segments of the economy had contracted in the COVID-hit 2020-21.

However, agriculture sector growth decelerated to 3 per cent from 3.3 per cent in FY21. Electricity, gas, water supply and other utility services segment grew by 7.5 per cent during 2021-22. The segment had contracted by 3.6 per cent in the previous fiscal. GVA growth in services sector - trade, hotel, transport, communication and services related to broadcasting - was 11.1 per cent during 2021-22 as against a contraction of 20.2 per cent in the previous year. Financial, real estate and professional services grew by 4.2 per cent in the year over 2.2 per cent earlier. Public administration, defence and other services posted 12.6 per cent growth against (-)5.5 per cent in 2020-21.

Also, nominal GDP or GDP at Current Prices in 2021-22 was estimated at Rs 236.65 lakh crore, as against Rs 198.01 lakh crore in 2020-21, showing a growth of 19.5 per cent As per the NSO data, per capita income (based on net national income) during 2021-22 was Rs 1.5 lakh per annum at current prices, up from 1,26,855 in 2020-21, showing a growth of 18.3 per cent. However, at constant prices, per capita annual income works out to be Rs 91,481, up 7.5 per cent from Rs 85,110 in FY21. Gross fixed capital formation was estimated at Rs 47.84 lakh crore in 2021-22, up from Rs 41.31 lakh crore in the preceding year.

The CNX Nifty is currently trading at 16572.45, down by 12.10 points or 0.07% after trading in a range of 16561.95 and 16649.20. There were 22 stocks advancing against 27 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were NTPC up by 1.79%, Asian Paints up by 1.35%, Coal India up by 1.35%, Tata Consumer Products up by 0.95% and Tata Steel up by 0.84%. On the flip side, Bajaj Auto down by 1.71%, Hindalco down by 1.49%, Dr. Reddy's Lab down by 1.13%, Wipro down by 1.11% and Ultratech Cement down by 1.10% were the top losers.

Asian markets are trading mixed; Hang Seng declined 142.96 points or 0.67% to 21,272.24, Taiwan Weighted fell 68.27 points or 0.41% to 16,739.50 and Shanghai Composite was down by 0.66 points or 0.02% to 3,185.77. On the other hand, Nikkei 225 surged 133.31 points or 0.49% to 27,413.11 and Straits Times was up by 18.41 points or 0.57% to 3,250.90.